HealthSouth Corp., Birmingham, Ala., said it is close to resolving a legal dispute over the company's attempt to foreclose on 99-bed Metro West Hospital, Fairfield, Ala. The company said it expects to take over the hospital from Fairfield Healthcare Authority and would keep the hospital open for at least three years as part of the deal. HealthSouth, which currently manages Metro West, began foreclosure proceedings in August, saying it didn't plan to close the hospital but needed ownership to protect its $42 million investment in the facility. The healthcare authority subsequently filed a $10 million lawsuit, seeking assurances that the 500-employee hospital would not close. Fairfield city officials created the authority in 1999 to purchase the hospital in partnership with HealthSouth from Tenet Healthcare Corp.
Meanwhile, HealthSouth's former CFO, William Owens, has resigned from the company's board more than six months after pleading guilty to fraud charges as part of a sweeping investigation of alleged accounting fraud at the company. A spokeswoman said the resignation was a formality and that Owens, one of five former HealthSouth CFOs to plead guilty in the case, has not actively participated in board meetings. -- by Julie Piotrowski